China Property Bubble To Rubble Part 2
China Vanke Sells $800 Million of Dollar Bonds at T+195 Bps
March 8 (Bloomberg) — According to data compiled by
Bloomberg.
• Issuer: Bestgain Real Estate Ltd.
• Tenor: 5-yr
• Issue Spread: T+195 bps
• Coupon : 2.65%
• Maturity Date : 13 Mar 2018
• Format: Reg S
• Rating : BBB-
It is trading 10 bp tighter now which works out to be about 0.5 cts on the bond price which is 100.50. (sorry been corrected here. issued at 99.39 and traded to high of 99.85).
America fell because of housing, but China is rising too fast because of it.
Just bring it to America !
| China’s Housing Bubble Goes Mainstream America |
Leading to comments like these,
| ZELMAN: This Is Housing Nirvana, I’m The Most Bullish On Housing I’ve Ever Been |
As the ghost towns build up, China’s largest homebuilder, Wang Shi says it would be a “disaster” if the bubble burst.
BUSINESS INSIDER : Scary New Satellite Pictures Of China’s Ghost Cities
They are doing the right thing now. Dump onto the masses then buy America, London, Singapore, Australia and of course, EUROPE. WSJ : CHINA GROUP IN TALKS TO BUY HISTORIC GM BUILDING STAKE No mainstream paper will dare to report on the negative now.
Washington Post : BBC blocked in China just days after reporting on Chinese hackers
But when a standard Shanghai apartment is over 45X income, 2 things have to happen. 1. Income to rise (property prices constant) or, 2. Prices to fall.
Governments are making attempts to do both right now, like in Singapore.
Strong rumours going around on another round of cooling measures coming into the Singapore property market, affecting mortgage servicing ratio. The expectation is for mortgage servicing ratio to be cut to 30% of the maximum base on monthly income.
Wouldn’t that drive buyers to Iskandar and London and wherever else ?
A friend advised that it may apply to offshore investment properties too, if the loan is taken in Singapore.
New launches in Potong Pasir and Clementi still see a healthy take up. If not for the recent CM, I’m sure they would have been snapped out. Interesting to note though the clementi condo launch is only 200 out of 755 units and they only sold 85. Who’s is going to buy the rest of the 555 units? Lets wait for fire sale like interlace, d leedon, sky habitual….
CM = Clementi Mall ?
555 units for another 1.5-1.6 mio people coming in ? Just buy and sit !
CM = Cooling Measures??
I really doubt there would be another round of cooling measures. Especially when PropertyGuru is reporting it too. Sorry folks, I still don’t see PropertyGuru as a credible news source. Servicing ratio has always been between 30-40%.
I will offer a contrarian view.
1) Now that folks cannot afford to buy cars in Singapore, people might channel their money into property instead.
2) If the wage restructuring prove successful, by that wage earners below the SGD 4K watermark get the raise that the government is sponsoring for, it would spur a demand in middle class housing. Everything gets repriced higher.
3) Properties below SGD 3mio would proved to be best for holding due to tax reasons.
I do agreed that there would probably be no more CM in the near future. However, I honestly feel that the property market is due for a correction soon, not this year but probably next year Simple logic, demand and supply.
Ask your self, how much more can resale flat go up? Mass market 2M?